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Airbnb claims $8.3bn lift to Japan's economy in 2016

Foreign users triple but growing competition lowers revenue for hosts

Airbnb is growing popular in Japan, but competition is heating up as well.

TOKYO -- Airbnb estimates that its services contributed 920 billion yen ($8.35 billion) to the Japanese economy in 2016, up 80% from the previous year, as foreign users took advantage of affordable lodging in big cities and rural areas.

The company's estimate includes lodging charges, local consumption such as shopping and food as well as the trickle-down effect of increased hiring.

Foreigners made up a majority of Airbnb guests in Japan, accounting for over 3.7 million users, nearly triple the number in 2015. South Korea led the ranks of Airbnb users from overseas, followed by mainland China, the U.S., Hong Kong and Taiwan.

The cities drawing the most guests were Tokyo's 23 wards, Osaka, Kyoto, Fukuoka and Sapporo. Osaka Prefecture achieved the highest Airbnb usage rate, the company's statistics show.

"It is cheap at about 3,000 yen per person," said a Chinese Airbnb user staying with his family of six in Osaka. "We can also do our own cooking for my parents, who do not like Japanese food."

Airbnb does not release the number of listed properties on its website but offers at least 15,000 in Tokyo and 11,300 in Osaka Prefecture, according to an independent survey by vacation rental research firm Hollywis.

Airbnb also attracts customers outside large cities. One rural area guesthouse in the Kagawa Prefecture city of Mitoyo attracted a lot of foreign guests because of its listing on Airbnb, according to the manager.

However, the many available properties have bred intense competition. The average number of nights stayed, including by Japanese guests, slipped to 3.4 last year from 3.5 in 2015. A property's average number of nights rented dropped by 12, to 89, and the average revenue collected was down 220,000 yen to 1,004,830 yen.

Many vacation rentals lack permission to operate under existing hotel laws. Properties also have drawn complaints over issues such as noise. The government looks to pass a bill allowing private vacation rentals throughout Japan during the current parliamentary session. The bill limits operating days to 180 per year and establishes a report and registration system. Airbnb intends a stronger response to hosts who violate the company's rules, such as by removing their listing.

(Nikkei)

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